The invention of NFTs created a brand new asset class for people to invest in, and their massive surge in popularity has resulted in countless people both rich and poor pouring their money into them. The term NFT stands for Non-Fungible Token, and they allow people to create unique digital representations of assets that can be stored on the blockchain.
Blockchain based assets are much more secure than their physical counterparts, so NFTs can dramatically improve copyright protection for artists as well as create a whole new branch of the art industry.
A Step by Step Guide to NFT Creation
Since NFTs are providing investors with such excellent returns, you might be interested in making one yourself.
The first step is to make sure that you own the copyrights to whatever you are making an NFT for. This can be any kind of digital art such as a painting or a song, and many have even created NFTs for popular memes they created which ended up getting reviewed on Trade Wise. Creating memes has been a largely thankless job up until this point, but with NFTs these creators can finally get just compensation for the contributions that they are making to internet culture.
It should also be said that NFTs don’t necessarily have to represent artworks. They can be practically any form of digital media, such as the case of Jack Dorsey’s first tweet which became a multi-million dollar NFT.
Whether you choose a song, painting or meme, owning the copyright is just starting point. It is also essential to ensure that your digital media is unique. This uniqueness will lend it a level of rarity that can really improve its valuation on the market.
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The second step is to find a blockchain that you want to house your NFT on. There are several options that investors can look through, such as the user friendly Binance Smart Chain as well as Solsea, Cosmos and numerous others. However, the most popular NFT blockchain by far is Ethereum. The creator of this blockchain, Vitalik Buterin, has optimized it significantly for NFT launches which explains the enormous levels of popularity it is currently enjoying in the market.
Another step that you should take concurrently with the one mentioned above is to create a crypto wallet. Coinbase has an excellent wallet feature, as does Trust Wallet and Metamask. Any of these options are ideal, and the key is to create a wallet that you can store your purchased crypto funds into. These cryptocurrencies will fund your NFT launch, so it’s essential to have a decent quantity on hand.
Since Ethereum is the best blockchain option for your NFT, it makes sense to buy Ether which is the cryptocurrency that is native to this particular blockchain. If you decide to opt for Binance Smart Chain, their native cryptocurrency Binance Coin would be your best bet. Going for native cryptocurrencies helps to smoothen out the NFT creation process. For NFT creators that are opting for the Solsea blockchain, Solana is the most effective option.
To create an NFT on the Ethereum blockchain, it helps to create an OpenSea account. This is a platform that is dedicated to the NFT market, allowing people to buy, sell and even create NFTs. OpenSea collaborates with Ethereum to create a seamless process that is also quite affordable. The best thing about OpenSea is that it lets you take advantage of the so called “lazy minting” method.
This allows you to mint an NFT without having to pay the blockchain charges. These charges would only be applied if and when your NFT is purchased by a market buyer, at which point the $20-$30 amount will be deducted from your account. Bear in mind that blockchain storage charges for NFTs can sometimes be a lot higher depending on how heavy and complex the digital file is.
That said, if this is your first time creating an NFT on OpenSea, you will have to pay an account initialization fee which currently hovers around the $70 mark. This is a one time fee, though, and subsequent fees will only be incurred in the event that your created NFT finds a buyer.
Now that you have all of your accounts set up, the only remaining step is to upload your file. It can be any file type, and smaller file sizes are usually better because their blockchain charges are on the lower end of the spectrum. Heavier files are higher quality, though, so you might want to find a balance between the two extremes.
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How to Monetize Your NFT
Once you’re done will all of these steps, all that’s left is to figure out how you want to monetize your NFT. If your main purpose for making an NFT is to maintain your copyrights over your work, you can skip the whole monetization process. Most NFT creators are looking to cash in, though, and they have a few options for doing so.
- The first is to set a fixed price for your NFT and wait for a buyer to snatch it up. Alternatively, you can choose to go the auction route by setting either a timed or unlimited auction up. Timed auctions are useful if there is a high demand for your NFT since they can spur rapid bids and drive your sale price up a fair bit.
- Newbie NFT creators might want to go for unlimited auctions though, because they give them the opportunity to keep the auction going for as long as required thereby giving them a better sale price in the long run.
As you can clearly see, NFTs are surprisingly easy to make and they provide a lot of opportunities for investors who are looking for rapid wealth accumulation. Ethereum’s reliable blockchain services are lending a lot of legitimacy to the NFT movement, and it would be best to strike while the iron is still hot!
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